Trade Adjustment Assistance: Exit Cohort Study

Transcription

1 AUTOMATED FOLLOW-UP SYSTEM 2010 Report Trade Adjustment Assistance: Exit Cohort Study Hiwot Berhane and Jesse Sampson Contact:

2 TAA is a program to afford time for American initiative, American adaptability and American resiliency to assert themselves. [It] is designed to strengthen the efficiency of our economy, not to protect inefficiencies. President John F. Kennedy The broad consensus among mainstream economists is that, on the whole, free international trade has positive effects on growth, income, prices and the variety choices available to consumers. Nevertheless, the aggregate benefits for the economy are usually only slightly larger than the negative effects, which tend to concentrate in a few industries. As a result, the gains in average income from a given liberalizing trade policy change tend to be overshadowed by its redistributive effects. The costs borne by the group of workers directly affected by trade include lost earnings, retraining or relocation and, for longtime workers, the destruction of job-specific human capital; resources allocated to assist these individuals can enhance the speed and efficiency with which the labor market adjusts to the shocks of trade policy (Johnson 2005). The federally-funded Trade Adjustment Assistance (TAA) program provides these resources to individuals who lose their jobs or face reduced wages because of imports or shifts in employment to other countries. To be certified as trade-affected and receive TAA services, a group of workers or their representative must file a petition with the US Department of Labor (DOL), who then approves or denies the petition based on statutory criteria. If DOL approves the petition, the workers are considered Trade-certified and can apply for TAA services through their state workforce agency. In Texas, TAA is a fully-integrated part of the workforce system administered by the Texas Workforce Commission (TWC). TAA participants come from a variety of backgrounds and industries, and therefore many enter the program with a wide array of skills and experience. However, the majority of TAA participants who enter the program face similar challenges in obtaining reemployment, which can include no education beyond high school, job skills solely in the manufacturing sector, and an average age of 46 with over 12 years of experience in a specific job that may no longer exist (TAA Texas State Profile 2011). In 2010, 131 (of 163) TAA petitions were certified in Texas, 12,893 Texas workers were covered by new certifications and $26,637,497 in federal funds were allocated to provide TAA benefits and services in Texas. The largest certifications in 2010 were in electronics manufacturing: 700 Hewlett Packard Workers, 700 Flextronics International and 600 Freescale workers obtained certification (Ibid.). TWC keeps a consistent focus on early intervention by integrating the TAA program with Workforce Investment Act (WIA) dislocated worker services such as skills assessment in order to achieve successful reattachment to suitable employment or training in new skills for highgrowth, high-demand occupations when suitable employment is not available. Automated Follow-up System 2010 Report 1

3 Trade-certified workers are also eligible for services under the Workforce Investment Act available any unemployed/ dislocated worker including job search assistance, skills assessments, and advanced vocational skills training as well as other assistance, such as transportation reimbursements and child care while in training provided through Texas One- Stop Centers. They also qualify for wage insurance and health care subsidies under TAA. A detailed description of TAA services and benefits appears in the program s latest annual report, found here The most important difference in actual services provided to TAA participants is training vs. non-training. Vocational training is available for TAA participants only if no suitable employment is available in their local commuting area. Training is the most visible component of TAA. According to a national survey of TAA participants published in 2010, 90 percent of participants (60 percent of eligible non-participants) were aware of subsidized training opportunities available under TAA before participation compared to less than 60 percent of participants aware of other TAA-specific benefits such as health care subsidies (just over 30 percent of eligible non-participants; Dolfin and Berk 2010). At the same time, 65 percent of TAA participants reported interest in training or schooling as a main reason for their participation in the program (Ibid.). However, the majority of TAA recipients do not receive training services. Purpose of the Report Senate Bill 281 (2003) requires the Texas Workforce Commission (TWC) to, at least annually, issue an analysis of the job placement performance of each workforce development program by occupation and by training provider (possibly including other relevant data), for the previous one-year, three-year, and five-year periods. TWC s Labor Market and Career Information (LMCI) department fulfills this mandate. We provide these data in the spirit of continuous improvement and do not seek to single out or punish any program, provider or geography. LMCI s mission is to improve the way Texans make career and educational decisions by providing useful and reliable information about careers, educational training options and jobs. For more information, visit Methodology LMCI received 18,389 original seed records for TAA exiters from the Policy and Service Delivery Department of TWC s Workforce Development Division. Each of these original records represents a service delivered to a unique client, i.e. a combination of SSN and service code. Because clients could receive more than one service, the input file included the same SSN multiple times. Seed records were grouped by SSN and by service category. After unduplicating the file by SSN, there were 17,039 usable, unique records. This report documents the labor market outcomes of those 17,039 TAA participants during the fourth quarter of 2009 (Q42009). LMCI determines labor market outcomes by linking the seed record file to several government databases. The most important data linkage is to the Texas Unemployment Insurance (UI) wage record database, to determine post-program employment and earnings. We also perform linkages with the Texas Higher Education Coordinating Board (THECB) master enrollment file for the fall semester of 2009, the results of which are available in the Higher Education Dashboard, found in the appendix. We also link data with the United Automated Follow-up System 2010 Report 2

4 States Department of Defense (DoD) and Office of Personnel Management (OPM) Q42009 employment files to locate any participants employed by the federal government. LMCI also linked records to the Texas Bureau of Vital Statistics (TBVS) database to identify and exclude deceased participants. After performing all exclusions, 16,975 records remained for analysis. If the linkage to the Q42009 UI Wage Record database records resulted in a match for any program participant, that participant s earnings and the North American Industry Classification System (NAICS) code for the employer of record were both retained for analysis. If a participant was found employed by more than one employer, the sum of the participant s earnings and the NAICS code of the employer paying the most wages were retained for analysis. Caveats About the Data and Analysis To our knowledge, there is no better source of data on labor market outcomes than UI wage records, but these data have some limitations. UI wage records do not cover individuals engaged in certain types of employment ranging from domestic workers to railroads (Stevens 2007). The collection of UI wage data involves editing to clean incoming data, but inaccurate records may remain in the system unless and until a claim for UI benefits is filed. SSNs are not validated against a national database: fraudulent SSNs may be present in the data as well as multiple individuals using one SSN (leading to outlandishly high earnings in some cases). Neither occupational title nor hours worked per quarter are reported, preventing us from calculating hourly wage and determining relatedness of training to employment or part-time/full-time status. This characteristic of the data can lead to low earnings in the case of individuals who worked only part of a quarter we sampled. Despite the limitations, data from UI wage records provide an invaluable glimpse of post-exit achievements of workforce training participants. In the fourth quarter of 2009 (Q42009), the period examined in this report, the Texas economy continued to fare better than that of most other states. According to the National Bureau of Economic Research, the U.S. economy peaked in December 2007 and entered the Great Recession, which officially ended in July 2009 (although subsequent growth has been anemic, with the remaining effects of the Great Recession strongest in the labor market). For reference to the median quarterly earnings and employment recounted in this report, the Q4009 Texas employment rate was 91.9 percent and the median worker s quarterly earnings were $6, Many factors, particularly the dynamics of the local economy and interplay with national and international trends all drive the metrics we use. The metrics tell part of the story about performance, but should not be used alone to make judgments about the quality (or lack thereof) of a single provider, Workforce Development Area or program. 1 US Census Bureau, American Community Survey 2009 One-Year Estimates, Worker s, divided by four to derive median quarterly earnings. Automated Follow-up System 2010 Report 3

5 Labor Market Outcomes: Employment Figure 1 shows employment for all TAA participants by selected characteristics for the 4 th quarter of 2009 (4Q2009). Participants in the training group had the highest employment (57.7 percent), while overall employment of Figure 1: Employment by Selected Characteristics the cohort was 48.4 percent. Participants in the Employment Services (ES) group had employment of 47.8 percent. Individuals who obtained training are likely be better prepared for employment in highgrowth sectors, and thus more likely to find employment than those continuing to look for work in the declining sectors that TAA targets. Males had a higher employment percentage during the snapshot quarter than their female counterparts with 48.9 percent employed compared to 44.9 percent. Flipping the trend with most TWC programs, individuals of Asian descent were employed at a lower rate than other groups, while individuals of African-American descent had the highest percent employed. Younger individuals tended to fare better in their job search than older individuals. Education level beyond high school was not a strong predictor of employment for this cohort. The employment rate of all groups with at least a high school degree/ged was between 48 and 49 percent, and the differences not statistically significant. However, those with less than a high school degree/ged were employed at much lower rates than other groups. Due to the manufacturing focus of TAA, these results are somewhat anachronistic, resembling a bygone era in the US economy when a high school diploma or GED was the ticket to gainful employment. Automated Follow-up System 2010 Report 4

6 Labor Market Outcomes: Quarterly s The overall median quarterly earnings for the group were $6,995, slightly higher than the comparable statewide measure, $6,663. The Employment Services group had higher median earnings than the Training group, $7,164 vs. $5,375. Individuals who received training likely found employment in new occupations or industries. Lacking the advantages of long experience enjoyed by participants who did not change occupations or industries, participants who received training had lower median earnings. 2 Subsequent analyses of this cohort should reveal the training group s returns to training as time passes. Figure 2 displays the earnings distributions and medians for both groups. Figure 2: s Distribution by Service Group (s Greater than Zero) 2 Since a switch of an occupation involves a substantial destruction of human capital, the associated decline in wages needs to be accounted for (Kambourov et. al. 2010) Automated Follow-up System 2010 Report 5

7 Labor Market Outcomes by Geography Figure 3 displays the percent employed and median quarterly earnings of TAA exiters by Local Workforce Development Area or LWDA. The most participants were found in Capital Area (Travis County), Dallas (Dallas County) and East Texas (Tyler and surrounding area) LWDAs. North East (Texarkana and surrounding area) LWDA had the highest percent employed at 64.3 percent, while North Central LWDA (area around the Dallas-Fort Worth metroplex) had the highest median quarterly earnings of $10,050 (over 50 percent higher than the Texas median of $6,663). East Texas LWDA could be said to have the best overall outcomes, with median earnings of $8,160 and 55.9 percent of participants found employed. Figure 3: Employment and s by LWDA, TAA Exiters Automated Follow-up System 2010 Report 6

8 Labor Market Outcomes by Industry of Employment Table 9 shows the top 10 industries of employment for all training participants employed in the target quarter. Employment Services was the most common industry sector of employment, followed by Elementary and Secondary Schools. Employment Services usually include temporary employment agencies that many employers use to find workers to try out first before hiring permanently. Employers also use Temporary Employment Agencies to augment staff during high demand periods without being saddled with paying benefits for permanent staff. We expect individuals who are continuously employed over the study period to move out of temporary employment and into an industry sector with longer term employment. The General Medical and Surgical Hospitals industry sector had the highest median earnings at $7,090. Table 1: Employment and s by Industry, TAA Exiters Industry of Employment N Working % Working Naics Code Employment Services 1, % $5, Iron and Steel Mills and Ferroalloy Manufacturing % $5, Railroad Rolling Stock Manufacturing % $12, Motor Vehicle Manufacturing % $10, Elementary and Secondary Schools % $4, Semiconductor and Other Electronic Component Manufacturing % $15, Executive, Legislative, and Other General Government Support % $7, Architectural, Engineering, and Related Services % $9, Other General Merchandise Stores % $4, General Medical and Surgical Hospitals % $6, Automated Follow-up System 2010 Report 7

9 References Cited Dolfin, Sarah and Jillian Berk (2010). National Evaluation of the Trade Adjustment Assistance Program: Characteristics of Workers Eligible Under the 2002 TAA Program and Their Early Program Experiences. U.S. Department of Labor Contract No. AK the%20Trade%20Adjustment%20Assistance%20Program%20Characteristics%20of%20Work ers%20eligible%20under%20the%202002%20taa%20program%20and%20their%20early% 20Program%20Experiences%20Final%20Report.pdf Johnson, George E (2005). The Labor Market Effects of Globalization and Trade Adjustment Assistance, US Department of Labor Occasional Paper ects%20of%20globalization%20and%20taa%20report.pdf Kambourov, Gueorgui, Iourii Manovskii and Miana Plesca (2010). Occupational Mobility and the Returns to Training. Working Paper. Stevens, David W. (2007). Employment That Is Not Covered by State Unemployment Insurance Laws. US Census Technical paper No. TP United States Department of Labor Employment and Training Administration (2011). Trade Adjustment Assistance State Profile: Texas. Online Document. Automated Follow-up System 2010 Report 8

10 Appendix A: Detailed Data Tables, All TAA Exiters Note: Cells with values less than 5 are marked NA to protect the privacy of cohort members. Table 2. Employment and s for Training Group by Gender Gender N N Working % Working Other/Unknown 1, $11,316 Male 10,952 5, $7,453 Female 4,753 2, $5,221 Table 3. Employment and s for Training Group by Ethnicity Ethnicity N N Working % Working Other/Unknown 5,360 2, $8,921 Not Hispanic 6,524 3, $6,959 Hispanic 5,091 2, $5,379 Table 4. Employment and s for Training Group by Race RACE N N Working % Working Other/Unknown 4,478 2, $6,960 Black 3,205 1, $5,932 White 7,571 3, $7,220 American Indian $7,690 Native Hawaiian $7,895 Asian 1, $7,855 Table 5. Employment and s for Training Group by Age Group Age N N Working % Working Under $4, ,266 3, $6, ,546 3, $6, $3,636 Unknown 1, $11,764 Automated Follow-up System 2010 Report 9

11 Table 6. Employment and s for Training Group by TAA Service Group Service Group N N Working % Working Occupational/Vocational $5,235 Es Participants 16,022 7, $7,164 Basic Education Skill $5,307 ESL $5,375 Job Search $17,042 Table 7. Employment and s for Training Group by TAA Service Service N N Working % Working On-the-Job Training $8,761 Occupational/Vocational Training $5,248 GED $5,874 Short-Term Prevocational Services $4,776 Training - Non-TWC NA NA NA NA ES 16,022 7, $7,164 Relocation Allowance $17,531 English as a Second Language 24 NA NA NA Basic Educational Skills/ABE 11 NA NA NA Job Search Allowance 6 NA NA NA Customized Training 9 NA NA NA Automated Follow-up System 2010 Report 10

12 Table 8. Employment and s for All TAA Participants by TAA Group TAA Group N N Working % Working Training Group $5,375 ES Group 16,022 7, $7,164 Table 9. Employment and s for Training Group by LWDA LWDA N N Working % Working North East Texas 1, $6,062 Middle Rio Grande $5,850 Gulf Coast $6,362 Texoma $4,488 East Texas 2,743 1, $8,160 South Plains $4,168 Alamo $5,475 Tarrant County $7,307 Central Texas $8,808 Cameron County $4,247 Lower Rio Grande Valley $4,461 Concho Valley $8,436 Capital Area 2,338 1, $7,240 North Central 1, $10,050 Rural Capital $6,821 North Texas $7,421 Brazos Valley $5,950 Coastal Bend $4,788 Upper Rio Grande 1, $4,493 Dallas 2, $8,781 Deep East Texas $7,069 Golden Crescent $4,034 Unknown $7,631 Permian Basin NA NA NA NA Heart of Texas NA NA NA NA West Central 10 NA NA NA Automated Follow-up System 2010 Report 11

13 Table 10. Higher Education Dashboard, Trade Adjustment Assistance Exit Cohort Study Summary of Linkage N % of Cohort s N % Higher Education Enrollment by Institution Type Working Only 7, $7,056 1, Community and/or Technical Colleges Pursuing Higher Education Only 1, NA Public/Private Universities & Health Science Centers Working & Pursuing High Ed $4,239 1, Total Found Enrolled Subtotal for All Working 8, $6,928 All Enrolled 1, NA Not Verified 2, NA Subtotal 16, NA TX Vital Statistics NA Total 17,039. NA Top LWDAs by Enrollment N Number Enrolled %of All Enrolled Top 10 Public Postsecondary Institutions N % of All Enrolled Top 10 Majors (6-digit Classification of Instructional Programs Code) N % of All Enrolled East Texas 2, Austin CC Liberal Arts & Sciences North East Texas 1, Tyler Junior College Nursing Capital Area 2, Vernon College Precision Metal Working Dallas 2, El Paso CCD Vehicle Maintenance & Repair Tech. North Texas N.E. Texas CC Environmental Control Tech Central Texas Angelina College Electrical Engineering Tech Upper Rio Grande 1, Kilgore College HVAC Technology Tarrant County TSTC Marshall Allied Health Professions Deep East Texas TSTC Waco Ground Transportation Rural Capital So. Texas College Criminal Justice &Corrections Automated Follow-up System 2010 Report 12

14 Appendix B: Detailed Data Tables, TAA Training Group Table 10. Employment and s for All TAA Participants by TAA Group TAA Group N N Working % Working s Training Group $5,375 ES Group 16,022 7, $7,164 Table 11. Employment and s for Training Group by Gender Gender N N Working % Working s Female $4,727 Male $6,407 Other/Unknown n/a n/a n/a n/a Total $5,375 Note: Cells with values less than 5 are marked n/a to protect the privacy of cohort members. Table 12. Employment and s for Training Group by Ethnicity Ethnicity N N Working % Working s Hispanic or Latino $4,900 Not Hispanic or Latino $5,846 Other/Unknown $7,428 Total $5,375 Table 13. Employment and s for Training Group by Race Race N N Working % Working s Other/Unknown $5,795 Black $5,176 White $4,975 Asian $6,554 Native Hawaiian or Other Pacific Islander 6 n/a 50.0 $11,812 American Indian or Alaska Native 6 n/a 33.3 $6,566 Total $5,375 Note: Cells with values less than 5 are marked n/a to protect the privacy of cohort members. Automated Follow-up System 2010 Report 13

15 Table 14. Employment and s for Training Group by Education Level Education Level N N Working % Working s High School/GED $5,401 More than HS $5,798 BA and Above $7,342 Elementary/ESL $4,398 No Grade 11 n/a 36.4 $4,198 Total $5,375 Note: Cells with values less than 5 are marked n/a to protect the privacy of cohort members. Table 15. Employment and s for Training Group by Age Group Age N N Working % Working s Between $5,472 Less Than $5,165 Between $5,333 Greater Than n/a 11.1 $3,683 Unknown n/a n/a n/a n/a Total $5,375 Note: Cells with values less than 5 are marked n/a to protect the privacy of cohort members. Table 16. Employment and s for Training Group by TAA Service Service Group N N Working % Working Occupational/Vocational $5,235 Basic Education Skill $5,307 ESL $5,375 Job Search $17,042 Total $5,375 Automated Follow-up System 2010 Report 14

16 Table 17. Employment and s for Training Group by LWDA LWDA N N Working % Working West Central n/a n/a n/a n/a Permian Basin n/a n/a $7,755 Central Texas n/a n/a $24,790 North East Texas n/a n/a 50.0 $6,572 Cameron County n/a n/a 50.0 $4,296 Heart of Texas n/a n/a 75.0 $1,973 Brazos Valley 5 n/a 60.0 $4,903 Coastal Bend 5 n/a 60.0 $4,446 Deep East Texas 7 n/a 42.9 $5,156 Gulf Coast $6,391 Capital Area $5,822 Texoma $5,425 Middle Rio Grande $5,514 Rural Capital $9,019 North Central $6,577 Concho Valley $4,872 Lower Rio Grande Valley $4,876 Dallas $5,482 Unknown $17,531 Alamo $5,880 North Texas $5,977 Tarrant County $6,314 East Texas $5,546 Upper Rio Grande $4,141 Total $5,375 Note: Cells with values less than 5 are marked n/a to protect the privacy of cohort members. Automated Follow-up System 2010 Report 15

17 Table 18. Top 10 Industries of Employment for Training Group by 4-Digit NAICS Code Industry of Employment N Working s NAICS Code Employment Services 65 $4, Elementary and Secondary Schools 26 $4, General Medical and Surgical Hospitals 22 $7, Executive, Legislative, and Other General Government Support 22 $6, Offices of Physicians 19 $4, General Freight Trucking 17 $4, Office Administrative Services 17 $4, Business Support Services 16 $4, Building Equipment Contractors 14 $4, Home Health Care Services 14 $3, Training participants were enrolled in higher education at a much lower rate than ES participants. Of 953 participants, 56 or 5.9 percent were found enrolled in higher education. Automated Follow-up System 2010 Report 16